Ever wonder why the banking sector continues to operate as it always has?
Here’s a possible answer: According to a report on Corporate Governance by Professor Emma Coleman Jordan of the Georgetown University Law Center (Public Directors Are Necessary to Restore Trust and Accountability at Companies Rescued by the U.S. Government) one simple issue might help to explain why change has been so elusive at the bailed out banks: Their people.
Jordan notes that the folks who run the major banks today — the senior executives, directors, managers, etc. — are essentially the same exact folks who ran them (into the ground) 5 and 10 years ago:
“The prospects for a robust prudently guided financial sector have been substantially clouded by the fact that the both the corporate governance structure and the executive leadership of the financial sector remain largely unchanged—92% of the management and directors of the top 17 recipients of TARP funds are still in office.”
You read that correctly — 92% of the TARP recipients’ senior management remains essentially unchanged post-crisis . . .
Hat tip HG
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Sources:
A Fair Deal for Taxpayer Investments
Emma Coleman Jordan
Harvard Law School Program on Corporate Governance, September 24, 2009
http://blogs.law.harvard.edu/corpgov/2009/09/24/a-fair-deal-for-taxpayer-investments/
A Fair Deal for Taxpayer Investments: Public Directors Are Necessary to Restore Trust and Accountability at Companies Rescued by the U.S. Government
Emma Coleman Jordan
American Progress, September 16, 2009
http://www.americanprogress.org/issues/2009/09/public_directorships.html
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